Expected Developments

Future Orientation of the Group

As of now, ALTANA does not plan to make any fundamental changes to its Group strategy or organizational structure for the next two years. The company will continue to focus on growing specialty chemistry markets and offering inno­vative chemical solutions tailored to customer requirements. This approach is expected to remain the main driver of business development.

Entering new market segments or application areas is not anticipated to fundamentally alter the sales structure in the medium term, nor the balanced regional distribution of sales.

However, further acquisitions could lead to changes in sales and market structures. Bolt-on acquisitions could result in shifts, as could the potential integration of a new business division. In addition, existing business activities might be sold or discontinued.

The area of occupational safety and the focus on environmentally compatible management will continue to be components of the ambitious objectives that shape the strategic orientation of the ALTANA Group.

Economic and Industry Outlook

For 2026, ALTANA expects a moderate improvement in demand. This assessment is based on the International Monetary Fund (IMF) forecast, which projects global economic growth of 3.3 % in 2026, continuing roughly at the same level as in the completed year (2025: 3.3 %). Geopolitical tensions from recent years persist, and additional economic uncertainties may arise from trade conflicts. Inflation rates, however, have continued to normalize over the past year. In 2026, inflationary pressures are expected to ease further, which should add stability to the economic environment. The IMF does not anticipate a renewed deterioration in global supply chains or energy supply.

As in the previous year, economic growth in industrialized nations is expected to be more moderate than in emerging and developing countries. The IMF forecasts growth of 1.8 % for all industrialized nations in 2026 (previous year: 1.7 %), with varying intensity across individual economies. In the U.S., growth of 2.4 % is projected for 2026, following 2.1 % in 2025. This increase is largely driven by high investments in technology and AI-driven infrastructure, as well as continued supportive fiscal conditions. In the Eurozone, the IMF expects growth of 1.3 % in 2026, slightly below the previous year (2025: 1.4 %). For Germany, the IMF projects a mod­erate economic recovery, with growth of 1.1 % expected for 2026 following 0.2 % in 2025. Economic development will continue to be weighed down by structural constraints, weak industrial demand, and the lingering effects of high energy prices, while higher government spending and fiscal stimuli provide some stabilizing support.

Emerging markets are forecast to grow by 4.2 % in 2026, remaining above the global average but slightly below the previous year (2025: 4.4 %). Growth patterns vary across individual countries. China is projected to grow by 4.5 % in 2026, slightly lower than in 2025 (5.0 %), benefiting from partial easing and diversification of trade relationships as well as stabilizing economic policy measures. Counteracting factors include weaknesses in the real estate sector, high corporate and regional debt, and slowing domestic demand. India remains one of the world’s most dynamic economies, with growth of 6.4 % expected in 2026, slightly below 2025 (7.3 %), supported by robust domestic demand and high public investment. Latin American economies are projected to grow by 2.2 %, slightly weaker than other emerging regions but stable compared with the previous year (2025: 2.4 %). Brazil and Mexico are expected to grow by 1.6 % and 1.5 %, respectively, below the expectations of some other countries in the region.

For 2026, the IMF outlines several macroeconomic risks that could jeopardize moderate global economic growth. A renewed escalation of trade conflicts, including the introduction of new tariffs and sanctions, would create further uncertainty. The IMF continues to regard the risk of renewed or escalating military and political conflicts as high. In this context, disrupted supply chains and rising energy and rawmaterial prices represent significant economic risks. According to the IMF, a possible overvaluation of productivity gains in connection with investments in artificial intelligence could also entail substantial macroeconomic risks through corrections in financial markets. Risks arising from climate change were not explicitly identified by the IMF, but they have not lost their relevance. The increasing frequency of major natural disasters poses a threat to economies worldwide.

For the chemical industry, global growth in 2026 is expected to be slightly below overall economic growth. The German Chemical Industry Association (VCI) expects worldwide chemical production to rise by 2.3 % in 2026, following growth of 3.5 % in the previous year. Growth in industrialized nations is expected to be weaker than in emerging and developing countries. The U.S. is projected to grow by 1.5 % and Europe to decline by 0.5 %, both significantly below China, where 6.0 % growth is anticipated.

Based on these economic and industry-specific conditions, we expect general demand in markets relevant to ALTANA to develop slightly positively, though with regional and market-specific differences. The extent to which changes in inventory levels along the value chain affect actual demand for our divisions’ products will largely depend on customers’ short- to medium-term expectations. Fluctuations in inventory levels can have a material impact on business performance.

Crude oil price developments remain difficult to predict. The average price per barrel fell significantly in 2025. For 2026, the IMF expects a further slight decline. The availability, pricing, and consumption volume of chemical products are influenced, to varying degrees, by the crude oil market. Expectations regarding future oil prices can also cause significant shifts in inventory levels along the entire chemical value chain.

As in previous years, key exchange rates relevant to ALTANA may exhibit pronounced volatility in 2026. Exchangerate movements may be influenced not only by regional interest rate developments and economic performance, but also by political factors. Deviations of actual exchange-rate movements from our planning assumptions may give rise to both risks and opportunities.

Expected Earnings, Asset, and Financial Situation

Expected Sales and Earnings Performance

Due to the anticipated moderate growth in the global economy, we also expect demand for our products and services to develop positively in the 2026 fiscal year. Operating sales growth, that is, growth adjusted for exchange-rate and acquisition effects, is expected to be in the mid-single-digit percentage range. The primary driver of growth is expected to be an increase in sales volumes.

For 2026, negative exchange-rate effects are expected compared with the previous year, primarily resulting from the relationship of the U.S. dollar and the Chinese renminbi to the euro, which are likely to weigh on nominal revenue growth. The same applies to the effects arising from the divestment of Von Roll Group business activities in 2025 as part of the integration measures at ELANTAS.

We do not expect any significant shifts in the cost ratios of the major functional expense categories in relation to sales. For the cost of materials ratio, we anticipate a development at a level comparable to the past fiscal year.

For 2026, personnel expenses are expected to increase at a rate slightly below operational sales growth. Relative increases in other operating expenses are likewise anticipated to remain below operational sales growth, supported by continued cost discipline and the systematic leveraging of synergies. Overall, we aim to achieve a slight reduction in operating expenses in relation to sales in 2026.

The EBITDA margin in 2026 should be slightly below the previous year’s level due to the absence of one-off effects recognized in 2025. As a result, the strategic target range of 18 % to 20 % is not yet expected to be reached. We forecast absolute EBITDA for 2026 to be approximately at the prior-year level. 

Beyond 2026, we expect operating growth momentum for Group sales in line with our strategic objectives in the mid-single-digit percentage range and a continuous improvement in profitability, with our long-term target range antic­ipated to be reached again from 2027.

Expected Asset and Financial Situation

No significant shifts in the balance sheet structure are expected for 2026 compared with the end of 2025. Our investment level in property, plant and equipment and intan­gible assets is expected to remain within our long-term target range of 5 % to 6 % of sales over the next two years. Absolute values of net working capital are expected to develop in line with general business trends, with a goal of slightly reducing the relative level compared with yearend 2025.

Based on the expected business development, we will continue to generate a clearly positive cash flow from operating activities in the coming years, which should exceed the previous year’s figure. The cash inflow will primarily be used to finance investments and, if applicable, further acquisitions.

We anticipate a marked improvement in value-management metrics compared with the previous fiscal year, primarily due to further growth in underlying revenues. Positive corresponding developments are expected for both relative and absolute ALTANA Value Added (AVA) as well as for Return on Capital Employed (ROCE).

Expected Development in Occupational Safety and Regarding the Environment

ALTANA has established the following target ranges for the three work accident indicators in 2026: WAI  1: 0 to 2.3; WAI 2: 0 to 1.6; and WAI 3: 0 to 25.7. These values refer to the entire ALTANA Group, including the Von Roll Group and Silberline Group companies acquired in 2023 and 2024. Compared with the previous year, a significant reduction in work accidents is expected. Specific measures have been initiated or prepared within the divisions, particularly targeting reductions in behavior-based accidents.

For greenhouse gas emissions in Scope 1 and 2 (calculated using the market-based method), a further reduction is forecast, even with increased production volumes. In line with the SBTi target corridor, ALTANA originally set a value of 123.9 thousand tons of CO_² equivalent for Scope 1 and 2 for 2026. Further potential for improvement is also seen in energy efficiency. The target for the specific energy parameter in 2026 is 1.38 MWh / t, compared with an actual value of 1.41 MWh / t in the previous fiscal year. In subsequent years, further reductions in specific energy consumption of approximately 2 % per year are targeted.

Risks

Management and control of the ALTANA Group are geared to the strategy that has been defined and the target levels derived from it. Due to changes in the economic environment or internal and external factors of influence, it might not be possible to implement the strategy successfully or to achieve targets in the planned time frame or to the planned extent. To be optimally prepared for such situations, ALTANA systematically identifies, evaluates, and considers risks within the framework of decision-making processes. Risks are defined as events and potential developments that could negatively affect the achievement of corporate objectives.

To anchor our risk policy at all decision-making levels, we established a Group-wide risk management system that brings together various information, communication, and monitoring systems. Core elements of our risk management include strategic corporate planning, internal reporting, our internal control system, compliance organization, and risk management in the strict sense.

Our strategic corporate planning is closely tied to our medium- to long-term financial planning. The extent of the fulfillment of our targets is examined in monthly reports on the company’s business performance and in our short-term financial planning. Apart from an analysis of the current business situation, these reports regularly discuss expectations for the current fiscal year at the divisional level. As a result, deviations from planned developments can be recognized and countermeasures introduced at an early stage if necessary.

Our internal control system defines, among other things, organizational and procedural requirements that serve to prevent damage to the company. It is intended to ensure the correctness of internal and external financial reporting as well as non-financial key figures, the effectiveness and efficiency of the company’s business activities, and compliance with the relevant legal regulations and internal guidelines. It comprises all principles, instructions, and measures introduced for this purpose. In connection with our established compliance organization, it aims to prevent possible violations of guidelines and laws by employees.

At ALTANA, risk management in the strict sense is viewed as the systematic compilation, evaluation, documentation, communication, and, if not already in place, deri­vation of measures regarding relevant risks as well as the determination and assessment of risk-bearing capacity. It is thus also an essential component of the company’s system of early risk recognition in accordance with section 91 (2) of the German Stock Corporation Act. This system was voluntarily examined by the auditor again in 2025. The audit confirmed that the Management Board had taken the measures required under section 91 (2) of the German Stock Corporation Act, in particular to establish a monitoring system, in an appropriate form and that the monitoring system is suitable in all material respects to identify developments that could jeopardize the company’s continued existence at an early stage with sufficient certainty.

Risks that are identified are evaluated in a uniform way. So-called evaluated risks are assessed based on the probability of their occurring and the potential damages. Indi­vidual risks are assigned to certain risk groups. Risks or risk groups rated as very high are those with an evaluated risk of over € 25 million for the coming twelve months. Risks with an evaluated risk between more than € 12 million and € 25 million are classified as high, those with an evaluated risk between more than € 5 million and € 12 million as medium, and those with an evaluated risk of up to € 5 million as low. The prioritization resulting from the assessment determines focal points for the development and initiation of countermeasures to prevent or reduce potential risk impacts.

The individual risks and risk fields described below could have a material adverse effect on the Group’s earnings, financial, and asset situation and thus give rise to a negative deviation from the forecast development. For risks cate­gorized as “medium,” “high,” and “very high” we address changes in our appraisal compared to the previous year.

After a 10 % increase in the short-term evaluated risks of the ALTANA Group in the previous year, the value decreased by 3 % in the reporting year compared to 2024. This reduction was mainly due to lower risks in the area of innovation platforms, reduced procurement and production risks, and a lower probability of a further economic downturn.

Economic and Industry Risks

The development of the general economic conditions worldwide has a decisive impact on our business performance. The performances of the economies of the U.S., China, and Germany – industrial nations important for ALTANA – have a particularly strong influence on the direction and intensity of demand for our products.

A global economic crisis leading to an economic collapse would bring about significant sales decreases with corresponding influences on our earnings. Recessions limited to certain regions in sales markets important for us could also significantly impair our business performance. With the global orientation of our sales activities, we try to shape our dependence on regional or national markets in such a way that the effects of geographically confined economic crises on the Group are limited.

Thus, the U.S. and China, the most important countries for us, each currently account for no more than 20 % of total Group sales. The distribution of our business activities in the core regions of Europe, Asia, and the Americas also has a balanced structure.

Furthermore, we continually update our appraisal of the regional economic development in our internal reporting system to be able to react to foreseeable effects by controlling our procurement, production, and sales activities. We react to long-term shifts in the regional significance of sales markets by adjusting our sales, production, and organizational structures.

In addition to general economic risks, there are marketrelated sales risks concerning individual product groups or application areas. Particularly medium- to long-term trends that structurally lead to a decrease in demand in our target markets can mean that we will not achieve our growth and profitability targets. We try to counteract industry-related sales risks by broadly diversifying our offer. We supply many different industries, which in turn sell their end products in various markets. Therefore, our dependence on the underlying markets is limited. Based on the available information, no single consumer segment accounts for significantly more than 20 % of our sales. The largest share is in the automotive sector.

The analysis of our industry-specific and applicationrelated sales is a component of our annual strategy and planning process. We also examine changes in future growth potential arising from demand trends and technological developments and adjust our strategic orientation in the divisions if necessary.
The risk of a global economic crisis or regional economic downturns remains significant. The projected loss values have risen sharply, while the probability of occurrence of individual global and regional economic crisis risks is assessed as declining compared to the previous year. Overall, this results in a slight decrease in evaluated risk. Both individual risks from global and regional economic crises and the entire risk group continue to be classified as high.

Sales Risks

Sales risks result primarily from changes in the market and customer structure and an associated increase in the intensity of competition, as well as from marketing risks for products or product groups due to specific demand trends or technological changes.

This can lead to decreasing sales revenues, which may be caused by declining sales volumes or falling prices. To the extent that it is not possible to adjust the cost structure in the short term, this can give rise to a drop in profitability.

We counter sales risks by continually optimizing and developing our product and service portfolio, above all based on our innovative capabilities. In this process, it is decisive that we cooperate closely with our customers at an early stage of development to align with dynamic market needs. Through our innovation strategy, we can counter increasing competitive pressures in our markets.

Major changes in the customer structure can occur due to customer loss, mergers, or backward integration. Due to our highly diversified customer structure, however, these risks are limited. In addition, we maintain a cooperative partnership approach within the framework of our key account management.

In the category of sales risks related to market and technology, both the estimated potential loss and the probability of occurrence have slightly increased compared to the previous year and represent the highest-rated risk for this reporting period. This is primarily due to negative developments in the competitive environment, particularly caused by difficult-to-predict and volatile changes in the trade policies of individual countries and, more generally, by continued cost pressures, including those driven by inflation. Overall, the magnitude of the assessed risk continues to be classified as high. For the risk group in sales and distribution, the prob­ability of occurrence has slightly increased due to price pressures on international contracts. In contrast, the potential extent of damage has slightly decreased. The overall assessed risk has risen slightly, but this group continues to be classified as a medium risk.

Risks from Business Combinations, Participations, and Other Investments

Apart from operating growth, acquisitions of companies, business activities, or technologies play an important role at ALTANA in implementing the strategy of sustainably prof­itable growth. Depending on the size of the acquired activ­ities, inadequate integration can place a burden on the Group’s earnings and limit its financial headroom. In addition, if business performance deteriorates compared to the assumptions made at the time of acquisition, impairment losses on assets may occur, negatively affecting earnings.

To minimize the effects of these acquisition-related risks, we examine acquisition targets systematically and comprehensively and analyze them in detail as part of a multistage approval process.

Moreover, the restructuring of business activities or the implementation of long-term efficiency measures may result in impairment losses on assets.

To implement its strategic objectives, ALTANA continuously expands and renews its development, production, and other facilities. The projects, some of which are very complex, are always subject to certain risks regarding adherence to schedules, budgeted costs, and the realization of expected goals. The projects regularly undergo extensive approval and monitoring routines. Compared to the previous year, the total potential losses have slightly decreased, while the probability of occurrence has slightly increased due to higher impairment risks in certain business areas. Risks arising from investments continue to be classified as medium risks.

Procurement Risks

Among the main procurement risks are restrictions in the availability of individual raw materials and transport services, as well as significant price increases for raw materials and logistics. If these cannot be passed on to the markets in the short term or only partially, they may negatively affect the Group’s earnings situation.

We continuously analyze the market situation in the rawmaterial and logistics markets relevant to ALTANA. This allows us to identify both price trends and structural changes on the supplier side at an early stage and prepare appropriate measures. These insights are incorporated into the design of our supply contracts. At the same time, we also take price volatility into account in our customer relationships. To be able to pass on price increases to the markets in the short term, we use the flexibility of price mechanisms and price lock-up periods.

Both the probability of occurrence and the potential extent of damage for the procurement risk group have slightly decreased compared to the previous year. A key reason for this is an overall lower risk of rising raw-material costs. The classification of the procurement risk group has not changed and continues to be assessed as high.

Financial Market Risks

Financial market risks primarily concern short-term and significant changes in exchange-rate relations and interest rates, as well as default risks and the coverage of financial resource requirements.

Exchange-rate fluctuations can result in negative effects on Group sales and earnings performance, both through the translation of foreign-currency positions into the Group currency, the euro (translation risks), and in connection with business conducted in foreign currencies (transaction risks). Interest-rate changes affect financing costs. Defaults on trade accounts receivable or financial receivables can adversely affect the Group’s earnings situation and its financial resources. A lack of available financial resources for the execution of acquisitions or major investment projects could prevent us from achieving our strategic objectives.

Material transaction risks are hedged through foreignexchange contracts in cases where we can assume with sufficient certainty that the underlying business will be realized. Further information on the assessment and accounting of hedging transactions can be found in the detailed Consolidated Financial Statements (Note 27).

To minimize credit default risks, systematic reviews of the creditworthiness and payment behavior of our business partners are conducted. This applies to both customers and our banks or other business partners whose payment defaults could affect our financial situation.

The availability of financial resources is safeguarded through centralized control and monitoring of Group-wide cash balances. In addition, a central financial framework is made available through the use of various financing instruments. This framework can be used to cover unplanned short- to medium-term financial requirements, for example, arising from acquisitions or a crisis-related decline in oper­ating activities.

Despite a slight increase in the total assessed risk, the financial market risk group continues to be classified as a medium risk. While the probability of occurrence has slightly decreased, the potential extent of damage has increased significantly due to a change in the level of bank deposits. Ongoing high inflows from operating activities and the existing general financial framework still exceed the expected outflows for investments, repayments, and dividends.

Innovation Risks

ALTANA’s position as an innovation and technology leader remains a key success factor for the company. As a supplier of highly specialized chemical products, it is important to continually introduce new products to the market and to be perceived by our customers as a competent and innovative partner. Should this no longer be achieved in the future, risks could arise for sustainable growth, the attainment of our profitability targets, and ALTANA’s positioning in the relevant markets.

Our innovation culture, which is practiced at all organizational levels, highlights the importance of innovation and safeguards its status. Both at decentralized and Group level, research and development activities are continuously evaluated and managed based on financial and non-financial criteria. By investing above-average amounts in research and development, we can consistently introduce products tailored to current customer needs, thereby positively influencing our competitive position.

Protecting the knowhow we develop through patents is crucial to converting our knowledge advantage into economic success. This also includes safeguarding technologies, methods, and product features currently in use so that they cannot be exploited by other companies.

For the group of innovation risks, both potential losses and the probability of occurrence are significantly below the previous year’s level, mainly due to the elimination of risks related to the former stake in Landa Corporation Ltd. Overall, the group of innovation risks continues to be classified as medium risk.

Other Risks

Production risks relate to technical disruptions or human error in production, which can lead to production stoppages, personal injury, or environmental damage. We aim to minimize the impact of machine failures on the value chain by operating production lines independently. Training in our clearly defined process and quality standards is mandatory for employees in the respective areas. In addition, we maintain property damage and business interruption insurance. The production risks group showed a further slight decrease in potential losses and a marginal decline in probability of occurrence. This risk group continues to be classified as medium risk.

Information technologies form the basis of nearly all ALTANA business and communication processes. Failures or disruptions of IT systems can result in extensive impairments across all value-added stages of the Group, potentially affecting business performance (IT risks). Additional risks include data loss or the theft of business secrets. ALTANA attaches great importance to the smooth availability of IT applications and services. To ensure this, appropriate processes and organizational structures are in place and continuously adapted to changing risk conditions and new technological possibilities. In addition to its own internal orga­nization and expertise, ALTANA relies on close cooperation with leading international IT service providers. The effectiveness of security measures is regularly reviewed through internal and external audits. Emergency plans exist in the event of significant disruptions or data loss. In the coming years, our focus will remain on security and protection measures, which will continue to be developed in line with the threat profile.

The delivery of faulty products can cause harm to people, property, or the environment and thereby create liability risks. This can have significant effects on the Group’s asset position. We minimize this risk through extensive process standardization in production and comprehensive quality-control measures. Additionally, we continuously conduct analyses to assess the hazard potential of our input materials and products and maintain appropriate insurance coverage.

Changes in political and regulatory frameworks can lead to restrictions on trade or foreign-exchange transactions. Political unrest can make it difficult or impossible to access the Group’s assets in the affected countries. Regulatory changes may also mean that certain products or ingredients can no longer be processed or sold, or only with significant restrictions. We continually monitor the political environment in key countries and incorporate current developments into our assessment of business relationships. Direct investments are only made in countries where we assume a high level of political stability. We actively participate in legislative processes and discussions on regulatory changes that are relevant to us, enabling early anticipation of possible new requirements.

Risks in regulatory and EH&S (Environment, Health & Safety) increased slightly, due to a marginal rise in probability of occurrence and a minor increase in potential losses, and are now classified as medium risk. This is mainly attributable to tighter international environmental protection regulations.

Political risks continue to be classified as high risk. Both the probability of occurrence and potential losses increased slightly compared to the previous year. Ongoing trade tensions and the imposition of tariffs between the U.S., China, and the EU are considered a driver of increased risk potential.

Risks from natural disasters, pandemics, and armed conflicts have slightly increased in potential assessment and remain in the high-risk category. While the potential extent of damage remains unchanged overall, the probability of damage from natural disasters linked to climate change has been marginally raised.

Logistics risks continue to be assessed as low due to the improved reliability of supply chains. Both the probability of occurrence and potential losses for this risk group decreased slightly compared to the previous year.

Compliance risks, arising from violations of laws, can create liability and reputational risks with a material impact on the Group’s earnings and asset position. We counter these risks through our Compliance Management System, including by regularly informing and training our employees on relevant legal requirements. The potential losses decreased slightly compared to the previous year, while the probability of occurrence increased marginally. This risk group continues to be classified as medium risk.

A key foundation for long-term success is competent and committed employees. If we are no longer able to recruit and retain qualified specialists and managers, risks could arise for the successful implementation of our strategy (personnel risks). To address these risks, ALTANA offers an attractive work environment and competitive compensation system, complemented by various pension and wealthcreation programs. In addition, we regularly provide training and development for junior staff, as well as specialized and managerial employees.

Compliant Group Accounting

Essential accounting-related risks arise particularly when extraordinary or non-routine issues are handled. These include the first-time consolidation of acquired businesses or parts of companies as well as the recording of the sale of Group assets. Accounting of financial instruments is also subject to risks due to the complex evaluation structure. Risks also arise from fraudulent acts.

At ALTANA, a separate department of the Group’s holding company coordinates and monitors Group accounting. Core components of the control system are the guidelines, process descriptions, and deadlines that this department defines centrally for all companies, guaranteeing a standardized procedure for preparing the financial statements. For complex issues, the instruments needed for uniform accounting are retained centrally for all Group companies. For recording extraordinary processes and complex special issues, we regularly obtain external reports, advice, and statements.

The financial statements of the individual Group companies are prepared decentrally by the local accounting departments. Hence the individual companies are responsible for preparing the financial statements, in keeping with Group guidelines and country-specific statutory accounting requirements.

The work steps needed to prepare the financial statements are defined such that important process controls are integrated. These include guidelines pertaining to the separation of functions and allocation of responsibilities, to control mechanisms, and to IT system access regulations. The respective management explicitly confirms to the Group’s management that the annual financial statements are correct and complete. In addition, important financial statements are audited by the company or Group auditors in charge.

Local financial statements are recorded and consolidated via standardized formats and processes in a central IT system. At the divisional and holding company levels, numerous manual and IT-assisted control mechanisms are applied. They encompass an analysis and a plausibility examination of the registered data and the consolidated results by Group accounting as well as by the controlling department and other departments with expertise in this area. Corrections of the information in the financial statements are generally made at the level of the individual company to ensure the data are uniform and reconcilable.

The company auditor and the Group auditor examine issues, processes, and control systems relevant for the generation of financial statements. The Group auditor reports on the audit directly to the Supervisory Board and the Audit Committee. In addition, audits are carried out by the central Internal Audit department.

After each process related to the preparation of the financial statements, optimization potential identified at the different levels is analyzed and adjustments of the pro­cesses are made.

Opportunities

The identification and evaluation of opportunities for our future business development is integrated into the different planning, analysis, and control processes.

Within the framework of strategic planning, we analyze demand trends as well as market and technology developments regarding options for action that could enable ALTANA to create value. In addition, the divisions continually examine possibilities of developing new sales markets. During the financial-planning process, the effects of action options are evaluated and discussed so that we can optimally exploit future opportunities. Finally, possible opportunities for short-term business development are dealt with in detail at all levels of management, together with the attendant risks.

Below, the major opportunities are described that could lead to ALTANA’s surpassing its short-, medium-, or long-term goals. The order corresponds to our assessment of the effects on our business performance.

Economic and Industry Development

Should the economic environment in the established and emerging industrial regions important for ALTANA, particularly in Asia, the Americas, and Europe, develop better than we anticipated, unexpected growth impetus could arise. As a result, demand for our products and services could develop more positively and exceed our forecast. The same applies to growth in the important emerging countries in Asia and South America. If growth here accelerates beyond expected levels, we could benefit from this due to our market positions.

In addition to regional factors, growth impetus can also result from individual branches of industry. Further potential could be opened up, in particular, if the automotive sector and the construction industry showed positive development, or if there was an increase in the use of silver and gray colors in the consumer sector.

Innovation

We must continually streamline our product and service portfolio to be able to continue to pursue our strategy for profitable and sustainable growth in the long term. Should ALTANA manage to enhance its innovativeness more quickly than expected, or to increase the share of new products with high demand potential beyond the target level, there would be even stronger prospects for growth. Furthermore, customers could demand innovative products manufactured and sold by us more quickly and to a greater extent than we had expected. The same applies if we enter new markets or open up new application fields for our products. A faster and more effective deployment of artificial intelligence across all processes could create further opportunities for growth and efficiency improvements, for example by increasing the speed of innovation, optimizing production control, enabling predictive maintenance, or supporting even better data-based decision-making.

Business Combinations and Portfolio Measures

Acquisitions play a key role in ALTANA’s long-term value creation. In recent years, we have been able to continuously develop the Group strategically through acquisitions and intend to continue doing so in the coming years.

Going forward, we intend to continue to boost our growth by acquiring businesses and activities. This is an essential prerequisite for achieving our strategic growth targets. Should opportunities arise in the future that exceed our expectations, this can help us strengthen our market positions and open up new market segments. This can also have a positive impact on the achievement of our strategic goals.

Synergies

The ALTANA Group is largely decentralized. Still, in some areas of the value-creation chain and in certain management functions, central units support the divisions in a coordinating role or provide shared platforms. To the extent that we manage to push forward the networks within the Group more strongly than planned, this may also unlock further potential to improve efficiency.